Page 29 - bne_May magazine 2023_20230503 BRICS

bne May 2023 Cover story I 29
Notably, Russia rebuffed OPEC’s first offer to join the oil cartel in 1983, but finally succumbed to OPEC+ in only 2016 after tensions with the Western ratcheted rapidly upwards after the annexation of Crimea two years earlier.
Another aspect of the new BRICS bloc is that between Russia, the Kingdom
of Saudi Arabia (KSA) and Venezuela, it will control a large swathe of global oil and gas production. Indeed, most of the BRICS are also major commodity producers accounting for large shares in agriculture, minerals and metals,
as well as major arms producers.
Trade booms
This is not a new Cold War. As everyone is a capitalist now, as bne IntelliNews has reported, this is an increasingly fractured world, but it is not divided into two camps. Most of the EMs want to maintain cordial and commercial relations with the West.
Given the choice, most countries would prefer to sit on the fence, especially
the poorer ones that are simply trying to earn enough money to fund their ongoing development. A survey of MENA countries made by bne IntelliNews’ sister publication bna IntelliNews found that most of the northern African countries see the war in Ukraine as a European problem that has little to do with them. Their relationship with Russia is simply as a trade partner that provides essential energy, raw materials and arms. To earn some brownie points with Moscow, Egypt, one of Russia’s closest partners in Africa, briefly considered selling Moscow 40,000 rockets, according to recently leaked
US intelligence documents, but backed away from the idea as too risky.
However, as the West increasingly finds itself playing a game of whack-a-mole in trying to enforce the sanctions, fence- sitting is becoming increasingly difficult. Russia has largely managed to evade sanctions so far and indeed so successfully that in 2022 it earned more money from oil and gas exports than it has earned
in any year since the fall of the Soviet Union; the current account surplus was an astonishing $227bn – twice the previous all-time record set only a year earlier.
Russia has been able to co-operate with “friendly” countries to find alternative routes to import banned goods. Western and Russian diplomats are travelling the world to drum up support for their sides, and as soon as one
route is closed another opens. In April, Turkey, Hungary and Serbia – all strong Russia supporters in Europe – said they were going to “rethink” their relations with Russia after coming under intense US pressure. Turkey even went as far
as halting exports to Russia overnight, but within weeks Russian trade via the breakaway and Russian-backed Abkhazia sprang up to replace it.
Blinken travelled to Kazakhstan and Uzbekistan in April to exhort their leadership to enforce Western sanctions with mixed results. He received due
lip service. Kazakhstan has imposed stricter inspections on exports to make sure they are sanctions-compliant
in the last month, while its leading metallurgical companies have broken off relations with their Russian counterparts in May, a month after
a Blinken trip to Central Asia.
However, Russia is too big to ignore and its trade with all these countries has soared in the last year. Washing machines have been a particularly hot item, as they carry chips that Russia can use to build smart missiles and repair tanks. And new routes are constantly appearing.
Kyrgyz Chairman of the Cabinet Akylbek Japarov. And trade with Georgia has also hit an all-time high. In the first quarter, Russian goods imports to Georgia grew by 79% year on year, while Georgia's export of goods to Russia increased by 61%. Georgia has become more economically dependent on Russia than at any time since its independence in 1991.
Talking past each other
Countries in Central Asia and the Caucasus have little choice but to trade with Russia, which dominates their regions, and the same is true, to a lesser extent, with other EM countries; North Africa remains heavily dependent on Russian wheat, fertilisers, energy and arms.
But the Western diplomats on the
road don't seem to understand the commercial imperatives for these countries and instead give long lectures about values and international law.
The EMs are getting thoroughly fed up with being lectured to by the West – a theme that Putin has been happy to play on. During his speech to 40 African lawmakers who were in Moscow at
the same time as President Xi’s visit in March, Putin said: ““Ever since the African peoples’ heroic struggle for independence, it has been common knowledge that the Soviet Union provided significant support to the peoples of Africa in their fight against
“As the West increasingly finds itself playing a game of whack-a-mole in trying to enforce the sanctions, fence-sitting is becoming increasingly difficult”
Kazakh and Uzbekistan have increased the number of joint projects they do with Russia threefold over the last year, according to Industry and Infrastructural Development Minister of Kazakhstan Marat Karabaev. Trade between Kyrgyzstan and Russia hit a new all-time high after expanding by more than 40% in 2022 to a record $3.23bn, according to
colonialism, racism and apartheid, how it helped many African countries to gain and protect their sovereignty, and consistently supported them in building their statehood, strengthening defence capabilities, laying the foundations of their national economies and workforce training,” Putin told the delegates to a ringing round of applause.
www.bne.eu